Prices of new homes in China rose at the fastest pace in two-and-a-half years in March from a month earlier, a private survey showed on Monday, driven by a raft of support measures to shore up the crisis-hit real estate sector. Data from the China Index Academy, a real estate research organization, show that the average price of new homes in 100 cities increased by 0.27% from the previous month in March, the largest increase since July 2021. This compares to a 0.14% month-on-month increase in February.
Since 2021, regulatory crackdowns on developers’ high leverage have triggered a liquidity crisis, and the real estate industry, the backbone of China’s economy, has fallen into one crisis after another. A series of stimulus and easing measures by local policymakers have failed to boost sales or increase liquidity. Relevant departments in Beijing slightly relaxed housing purchase regulations last week, abolishing the restriction on individuals purchasing a municipal house within three years of divorce.
There were 43 cities with monthly increases in new housing prices in March, 3 more than in February. The megacity of Shanghai saw the highest price growth at 1.09%, while the northeastern city of Changchun saw the largest decline at 0.68%. However, in the first three months of this year, the total sales of 100 real estate companies fell sharply by 49.0% compared with the same period last year, indicating that the industry has not yet improved. The China Index Academy said, “The intensive introduction of property market policies may lead to a gradual recovery of market sentiment.” “The decline in new home sales may narrow in the second quarter.”
